Customer-Focused Service Guarantees and Transparency Practices (2018)

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77 The results of the literature review, survey, and case examples provide useful information about service guarantees and customer-focused transparency. Generally, the most successful programs were those that engaged customers and employees during the program development stage, implemented service guarantees and customer-focused transparency together in the context of broader policies or initiatives, and kept long-term sustainability and scalability in mind. This concluding chapter provides a summary of the main findings and suggests some topics for future research. Summary of Findings Findings are grouped by topic: service guarantee findings, customer-focused transparency findings, and overall findings. Service Guarantee Findings • Prevalence of service guarantees – Low prevalence of service guarantees with action. Seven of the 14 transit agencies that had service guarantees did not promise to remunerate customers or take some other action in the event the guarantee was not met. Two of the seven transit agencies that promised actions in their service guarantees have discontinued their guarantees, leaving only five transit agencies (of the 22 surveyed) that have a service guarantee with a promised agency action. – Most service guarantees involved punctuality, cleanliness, or customer experience. The most prevalent types of service guarantees were punctuality, customer experience, and cleanli- ness guarantees. Some guarantees did not fit into these predetermined categories. Several transit agencies had guarantees related to safety, customer information, and courtesy. • Service guarantee forms of remuneration – Fare credits are most common remuneration. The most common form of customer remuneration for late service (i.e., violations of a punctuality guarantee) was a credit toward future transit fares—usually in the form of credit equal to the amount of fare paid for the delayed trip or in the form of vouchers or coupons toward a set number of trips. – Alternative forms of remuneration exist but are rare. Unique approaches to customer remuneration include reimbursing customers for expenses paid to take alternative transpor- tation, reimbursing customers for late fees related to child care, and discounting monthly passes when monthly on-time performance drops below 85%. – European transit agencies provide unique examples of remuneration. European transit providers found during the literature review provide remuneration through cash refunds (rather than a fare credit), and some providers reimbursed customers for alternative trans- portation taken in the event of an anticipated transit delay of 20 min or more. C h a p t e r 7 Conclusions

78 Customer-Focused Service Guarantees and transparency practices • Punctuality guarantee thresholds and limitations – Punctuality guarantee thresholds vary. The most common threshold that would trigger remuneration under a punctuality guarantee was 30 min; over half of the thresholds were 20 min or less. All thresholds were at 60 min or less. – Punctuality guarantees mostly apply to rail. Three of the five North American transit agencies that currently provided remuneration for punctuality guarantees applied the guarantee only to rail services. Only two, Denver RTD and Dayton RTA, had guarantees that also applied to bus service. – Punctuality guarantees have several limitations. Most transit agencies placed some limits or exclusions on guarantees providing remuneration, the most common being excluding delays attributable to causes outside of the transit agency’s direct control. Most transit agencies limited how long customers had to file a claim under a service guarantee. Claim windows varied from as little as 7 days to as much as 2 months or 60 days after the delay incident. • Claims processing – Claims validation requires staffing and AVL or similar data. Transit agencies typically used AVL or similar operations data to validate customer claims before issuing refunds and closing the claim, a process that takes between 5 and 15 min. Transit agencies reported having between one and four employees working on processing claims. – Automation of claims processing is rare but efficient. GO Transit was the only transit agency that developed an automated solution for processing claims. The system accepts the claims, validates the claim against operations data, and issues a refund to the customer’s smart card—all without GO Transit staff intervention. • Service guarantee benefits – Service guarantees can improve public perceptions. Transit agencies often reported improve- ments in customer, public, media, and elected official perceptions of the transit agency because of their service guarantees. – Service guarantees can improve customer satisfaction. Transit agencies reported increases in customer satisfaction, and two transit agencies provided supporting empirical evidence. This increase in satisfaction may come from the direct effect of the guarantee and remuneration or from the indirect effect of improved service quality. – Service guarantees can increase employees’ customer service. Transit agencies reported improvements in their employees’ commitment to customer service resulting in improve- ments to transit service quality. • Service guarantee challenges – Administrative burden can be high. Claims validation can be difficult and take significant effort if the process is not automated. – Employee buy-in is not guaranteed. Lack of employee buy-in and support for the guarantee can cause problems during implementation of the guarantee or in using the guarantee as a tool to improve transit service. Customer-Focused Transparency Findings • Prevalence of customer-focused transparency – Customer-focused transparency is more common than service guarantees. Seventeen of 22 surveyed transit agencies exhibited some form of customer-focused transparency (compared to seven transit agencies with service guarantees). – Commonality of reported metrics. Transit agencies tended to report several metrics as a part of their programs, and the most commonly reported metrics were on-time perfor- mance, accidents, customer comments, and customer satisfaction. – European transit agencies provide unique examples of alternative metrics. European transit providers found during the literature review provided examples of unique performance

Conclusions 79 metrics. For instance, TfL measures excess wait time and customer travel time reliability. Other transit agencies used mystery shopper programs to monitor their performance. • Customer-focused transparency reporting and publishing – Downloadable performance reports are most common, but web pages are also used. The most common method for publishing performance data was a PDF or other electronic document available for download, but static and interactive web pages were also notable methods used by several transit agencies. As more transit agencies begin to automate reporting processes, transit agencies may increase their use of web pages to display perfor- mance information. – Context is important in performance reporting. Almost all transit agencies included some form of context in their performance reports (e.g., a target, historical data, or benchmark) to help customers interpret performance data. • Customer-focused transparency benefits – Customer-focused transparency can improve a transit agency’s public image. Transit agencies reported improvements in the perceptions of elected officials, the media, and the general public. – Customer-focused transparency can improve customer satisfaction. Transit agencies reported improvements in customer service, service quality, and even customer satisfaction. In a few cases, transit agencies reported improved relationships (e.g., increased trust) with key stakeholders. • Customer-focused transparency challenges – Administrative burden can be high. Without automation, the process of collecting, cleaning, and summarizing performance data and producing reports can require significant effort. – Providing data may result in additional requests for data. Some transit agencies reported that they experienced an increase in requests for raw data or new performance metrics as a result of their customer-focused transparency programs. Overall Findings This study provided some insights into the combined implementation of service guarantees and customer-focused transparency. This section discusses those findings that apply to both service guarantees or customer-focused transparency and their joint role in a transit agency’s customer-focused practices: • Low prevalence of service guarantees and customer-focused transparency together. Although the survey sought out transit agencies that had either service guarantees or customer-focused transparency, only eight of the 22 responding transit agencies currently had both practices in place. • Administrative burden a perceived barrier to implementation. Transit agencies that have not yet implemented a service guarantee or customer-focused transparency reported that concerns about the administrative burden of such programs are obstacles to implementation. • Engagement of employees and customers is recommended. Transit agency employees’ involvement is important at every level and every step of a transit agency’s customer-focused initiatives. Employees provide feedback, insights, and solutions to help make initiatives successful, and ultimately the success or failure of a customer-focused initiative depends on the actions and attitudes of employees. Transit agencies that took the time to systematically engage customers during the devel- opment and intermediary stages of customer-focused initiatives reported significant benefits from that engagement. Customers helped transit agencies better identify customer needs, communicate using meaningful language, and craft programs that were generally well received.

80 Customer-Focused Service Guarantees and transparency practices • Supporting, empowering, and reinforcing employees improves outcomes. Transit agencies with successful programs provided adequate tools and guidance to ensure employees could succeed in delivering the agency’s commitments and programs. Empowered employees are more likely to make decisions that result in better customer service and overall performance. • Simple customer-focused programs are more effective. There are many possible service guarantees and customer remunerations, and there is a plethora of available performance metrics to choose from. The success of any program is likely in how well it is received and perceived by customers. Customers should be able to find, use, and benefit from a transit agency’s service guarantee or customer-focused transparency with as little effort as possible. Despite good intentions, a customer-focused initiative that is difficult for customers to use will not produce the desired outcomes. Future Research Given the relatively limited recent research on the topic of service guarantees and customer- focused transparency practices, the relatively low prevalence of joint service guarantee and customer-focused transparency programs, and the additional questions raised by this report, there is still work to be done to make service guarantees and customer-focused transparency more broadly accepted and implemented among North American transit agencies. The synthesis team has identified a few areas for future research that may help advance the practice of these customer-focused practices in the transit industry. Internal versus External Guarantees Several transit agencies surveyed had internal standard operating procedures that provided the equivalent of a customer service guarantee, but these procedures are not publicized. For example, one transit agency reported having an internal policy to essentially do whatever it takes to ensure that a customer gets to his or her final destination (this could include transporting the customer in a nonrevenue vehicle). These procedures are in place to ensure the satisfaction of current customers and are not advertised. Internal procedures fell outside of the scope of this report; understanding transit agency practices that are essentially internal service guarantees may be beneficial future research—in particular what are the perceived barriers to going public with internal policies, why were internal policies put in place, and what context is necessary for transforming an internal policy into an external policy? The Role of Service Guarantees and Customer-Focused Transparency in Contracted Operations (i.e., Purchased Transportation) Many transit agencies use a third party to provide public transit services using some form of contract. These contracts may have service performance requirements and have liquidated damages incorporated into the contract when the contractor fails to meet those requirements. How ser- vice guarantees and customer-focused transparency currently (or could) fit into these contractual arrangements is unclear. Could a service guarantee with remuneration paid by the contractor be used by the transit agency in lieu of liquidated damages? Or would forcing a contractor to implement a service guarantee result in higher service prices or other undesirable outcomes? The Effect of Real-Time Data on Punctuality Guarantees Punctuality guarantees are usually a promise that transit vehicles will arrive within a given number of minutes of a scheduled arrival time. As more transit agencies provide real-time arrival

Conclusions 81 data, will the punctuality guarantee become obsolete—particularly within the context of high- frequency services, where scheduled arrival times become less and less important? How does knowing when the bus is actually coming change the perception of punctuality and the nature of a punctuality guarantee? The Effect of Denied Service Guarantee Claims and How to Reduce Them The service guarantee claim denial rates obtained from the survey were relatively high (25% and greater). What are the effects when customers submit a service guarantee claim but are denied? How can transit agencies reduce customer frustration both when claims are denied and by providing the necessary information to customers to avoid getting a denied claim? The Difference between Promises, Charters, and Guarantees Although this report treated service promises, customer charters, and service guarantees (both with and without remuneration) as a service guarantee, some of the nuances of these different forms of agency commitments were lost. Future research may consider separating these different types of commitments from one another and identifying their prevalence, benefits, challenges, and lessons learned. The Use or Potential Role of Alternative Transportation as a Component of a Service Guarantee The explicit use of alternative transportation options (e.g., taxis and transportation network companies) was rare among surveyed transit agencies, but these services were found in European transit agencies and could serve as a resource for transit agencies. Transit agencies could either reimburse customers for expenses related to taking alternative transportation or directly arrange and pay for rides provided to customers in the event of a service delay or missed connection. Future research may consider whether alternative transportation options should play a larger role in transit agency service guarantees and how that role should be defined. Safety Guarantees As previously mentioned, several transit agencies also included some form of safety guarantee, which was not a category included in the survey or industry scan but was identified after transit agencies listed additional commitments on their own. Future research on service guarantees should include customer safety as service characteristic that transit agencies are working to guarantee. The Effects of Service Guarantees and Customer-Focused Transparency on Customers Although this study demonstrated the current state of practice at North American transit agencies for service guarantees and customer-focused transparency, the synthesis did not collect data on actual customer experiences and attitudes related to these practices. Much previous research has been done on customers in the commercial industry. Tool Kit or Guidebook for Transit Agencies Because of the relative scarcity of robust customer-focused practices at transit agencies and the apparent lack of guides, best practices, or resources for transit agencies to pursue and implement

82 Customer-Focused Service Guarantees and transparency practices customer-focused practices, the synthesis team recommends the compilation of tool kits, guidebooks, or workshops to assist transit agencies in implementing customer-focused practices, including service guarantees, customer-focused transparency, or other initiatives. This synthesis about customer-focused service guarantees and transparency practices has illuminated the current state of the industry, which appears to have placed a priority on trans- parency but has not generally accepted service guarantees as a norm. Previous research suggests that service guarantees may be an important tool in reducing perceived risk of trying transit and a way to recover customer satisfaction in the event of service disruptions or bad experiences on transit. It is recommended that transit agencies explore all options available and learn from the experiences of other transit agencies about how to implement and maintain successful customer-focused service guarantees and transparency programs. Increasing the transit industry’s focus on the customer experience and the expectations of both customers and stakeholders for high-quality service and transparency may help transit’s standing in the long list of available transportation options.